Posts tagged ‘unemployment’

It is Thanksgiving and I can’t get over the conversation I had with Chris Lauzen last week over the topic of a living wage ordinance. Even though I was born and raised on the mission field in West Africa, I don’t think that a politician’s faith should matter, unless that politician makes it part of his or her campaign. Chris Lauzen has put his faith front and center in most of his political endeavors – his political views as one who professes very publicly to be Roman Catholic are fair game. And, if you read the press release linked above you will notice that Lauzen doesn’t mind criticizing the Pope when the Pope admonishes Republicans. Maybe Chris is more in tune with God than the Pope is?

This morning I read a recent speech by Pope Francis who condemned the idolatry of cash in capitalism and called for a society with people, not money, at its heart. “It is the consequence of a global choice, an economic system which leads to this tragedy; an economic system which has at its center an idol called money.”

It made me think that the phone conversation Chris and I had should be made public and I should let readers decide if they think Lauzen is a man of faith or another hypocrite.

Leo Panitch and Sam Gindin (authors of The Making of Global Capitalism: The Political Economy of American Empire): As long as effective demand remains low and banks demand austerity to protect their assets, the crisis will deepen.

Part Two: The Crisis and Who Has the Power

Major structural change or effective short term reforms requires addressing democratic decision making starting with making banks a public utility.

In Southern Spain, Juan Manuel Sánchez Gordillo, mayor of the small town of Marinaleda, is helping organize a growing protest movement against the austerity measures imposed by the Spanish government. Sánchez Gordillo and the landless peasants that follow him are at the forefront of demonstrations seeking a radical change in the country’s economic policies in response to the country’s worsening crisis.

Public spending is under assault from the United States to Europe in the name of fighting deficits. Nobel Prize-winning economist Paul Krugman argues in his new book, “End This Depression Now!”, that the hysteria over the deficit will constrain an economic recovery in a time of high unemployment and stagnating wages. “The economics is really easy,” says Krugman, “If we were to spend more money at the government level, rehire the school teachers, firefighters, police officers who have been laid off in the last several years because of cutbacks, we would be a long way back toward full employment. … Right now there’s just not enough spending. We need the government to step in and provide the demand we need … We’ve had austerity in the face of a recession in a way that we’ve never had before since the 1930s. The results are clear — it is disastrous.” Krugman writes about the economy as a columnist for the New York Times and is a Professor of Economics at Princeton University.

HR 870: The Humphrey-Hawkins 21st Century Full Employment and Training Act

Although the Great Recession officially ended in June 2009, the US economy has failed to provide the jobs needed for long term, sustained growth. At the current rate of job creation most economists believe we would not recover the 8 million jobs lost until 2016. To generate the growth required to employ both the unemployed and underemployed, we need a serious commitment to job creation such as that embedded in HR 870–the jobs bill introduced by Rep. John Conyers, Jr. (D-MI). Following is a summary of this legislation as well as a discussion of why socialists – indeed all progressives – should support the bill.

A Deficit Neutral Jobs Program

HR 870 would not add a dime to the federal deficit. The jobs created by the act would be funded through a tax on the trading of financial assets: stocks, bonds, and currencies. The tax would be levied on both the asset itself and on the trading of derivatives (e.g., futures and options) based on the asset. The tax proposed in HR 870 is a very modest one of 0.25% of value traded or $1 on every $400 of value traded. The amounts raised, however, could easily exceed $400 billion/year.

The Jobs to Be Created

HR 870 is explicitly designed to put people, large numbers of people, to work quickly. HR 870’s fast track job creation focuses on painting and refurbishing schools, community centers and libraries; restoration of abandoned and vacant properties in foreclosure-decimated neighborhoods; expansion of emergency food programs; and renovation and maintenance of parks, playgrounds “and other public spaces.” These jobs, which are the ones to be filled during the first 9 months of the economic opportunity grants provided for under the Act, do not require long periods of training but instead are much like those created under the CCC and the WPA in the 1930s. After the initial 9 month period, priority is given to construction / rehabilitation / improvements of residences or public facilities. These include energy efficiency improvements and programs targeted at disadvantaged youth.

Who Would Be Employed?

HR 870 recognizes that one of the features of the Great Recession is the record high level of long term unemployment, people out of work for 26 weeks of more. These are the first to be hired under the terms of the Act. The second category of new hires is low income workers unemployed for at least 30 days.

Protections in the Act

Some job programs pose risks to employed workers because employers may replace them, often at lower wage levels, with new hires. HR 870: (i) prohibits replacement of any existing employee with someone hired with funding from the Act; (ii) requires that anyone hired under the Act be paid no lower wage than workers performing the same work; and (iii) requires that, if the Act is used to employ people in a unionized workplace, the union must agree to the terms of new hires. Finally, employment under the Act must be for a minimum of 12 months.

Why Support and Organize around HR 870

HR 870 simultaneously attacks two of the major problems of the US political economy: a labor market that fails to provide enough jobs – much less good jobs – to meet our peoples’ needs and an inefficient and bloated financial sector.

It is also rooted in the understanding that a lack of demand is the primary reason the US economy is failing to achieve levels of growth and output that are sufficient to provide employment for all who are willing and able to work. The Act is explicit in its commitment to the role that the public sector has in generating economic growth.

Jobs and the Failure of the Financial Sector

High levels of unemployment and underemployment in the US have been a growing problem over the past three decades. In the period 1945 – 1975, the unemployment rate was 4% or below during 75 months, more than 20% of the 360 month period. However, during 1975 – 2010, the unemployment rate was 4% or below during only 5 months, barely 1% of the 420 month total time.

At the same time, financial sector growth accelerated sharply, with financial sector profits reaching almost 45% of total business profits in 2005/06. It is essential to remember that finance is a cost to the economy as a whole. Finance, when functioning appropriately, simply enables the rest of the economy to perform well by lending, raising and allocating capital to businesses and households. The trading of paper claims to assets does not help the economy to grow although it may generate large profits for some financial institutions, a significant portion of which ends up in the pockets of a small number of decision makers at financial institutions. These high rewards are a strong incentive for the firm to take on additional risk, shifting focus and resources into trading rather than capital raising and allocation. Thus, taxing this socially useless activity will not only provide funds for jobs, it will also reduce the rewards of financial speculation and help redirect resources, especially talented individuals, into other occupations.

Creating Demand

How do you restart an economy that is functioning at less than full resource utilization, as in the case of the US today? The stimulus passed in early 2009 had some good features and did save a significant number of jobs. However, it was overly dependent upon indirect jobs creation, tax breaks to businesses in the hopes that they would then hire more workers. Households have cut back on their spending, reducing demand for goods and services and leaving businesses reluctant to expand output and increase hiring to the degree necessary to significantly reduce employ ment. HR 870, by using funds to hire workers quickly and directly, puts money into the pockets of working and middle class families, who will spend most of their wages on clothes, food, and shelter, increasing growth in these crucial sectors.

The Role of Government

Finally, HR 870 uses the resources and capabilities of government to restart the economy rather than cutting spending or providing additional tax breaks to employers and hoping that the result will be new hiring and a restart of economic growth. This is an explicit recognition of the central roles that government, the public sector, has in directing and generating economic growth.

What Can I Do to Help?

Building the support necessary to pass HR 870 won’t be easy. It is important to let your congressmember know that you support HR 870 and that you expect them cosponsor the bill. If you are active in your union, place of worship or political club, ask it to support the bill, too. In many communities activists are demonstrating or holding “First Friday” vigils on the day that the monthly unemployment figures are released. These actions call attention to the plight of unemployed and let the public and politicians know that we expect them to do something about the jobs crisis.

Democratic Socialists believe that both the economy and society should be run democratically—to meet public needs, not to make profits for a few. To achieve a more just society, many structures of our government and economy must be radically transformed through greater economic and social democracy so that ordinary Americans can participate in the many decisions that affect our lives.

For more on the political perspective of the Democratic Socialists of America, click here.

The last rally was covered by The Voice (Not an on-line article, but their website tells where you can pick up a copy), and The Beacon News.

August unemploymet numbers (9.1% unemployed) showed little improvement in the economic crisis facing millions of American families. The Chicago Political Economy Group (CPEG) points out that adding the 13.9 million unemployed together with the 6.5 million discouraged workers means that over 20 million American families are still suffering even though the Great Recession was declared “over” more than two years ago.

My son spent last year and part of this one deployed in eastern Afghanistan, so the loss of dozens of troops we’ve experienced today in eastern Afghanistan strikes me much more personally than it might have a couple of years ago. It also strikes me as tragic that it takes such a large mass of casualties for the mainstream media to care enough to give an Afghanistan or Iraq war story headline room; most days, despite the fact that we most likely lost a man or woman or several in one of these wars on that day, it’s hard to tell from the press that we are still at war in two countries. Throughout my son’s deployment I struggled every day, every single day, to come to terms with the fact that he might not come home alive, and every single day I failed to be able to get my head around that.

One day I would get news of several of his friends and fellow platoon members being wounded or killed, another I would hear about some incredibly dangerous situation he somehow miraculously escaped unscathed, on another I would learn of plans and dreams he just hoped he would be able to come home and put in motion and I would be in tears with the fear that he would never have that chance, and then on yet another day I would hear…nothing at all. And those silences were the most terrifying by far. It was a terrible year.

My heart grieves for these 31 soldiers who will not come home to live out their dreams. May their families and loved ones find peace and comfort. As I said, I was never able to get my head around how one could possibly ever find peace or comfort in these circumstances, but it is my fervent wish for them nevertheless.

Next up: jobs report, due out tomorrow. But I’m sure that will be good news. Lots of people are saying that it’s going to be good news. Sure, none of the unemployed people I know are saying that, but lots of people are optimistic. I know I read that somewhere on the intertubes.